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Inclusion Criteria:

* Male and female adult patients, 18-75 years of age
* Diagnosis of high risk MDS including oligoblastic non-proliferative (WBC \<13 Gpt/l) AML up to 29% of bone marrow blasts
* Availability of BM blast count from central morphology
* Bone marrow blasts ≥ 5%
* IPSS score intermediate or high
* alloHCT intended within the next 6 months
* ECOG performance status of 0 or 1
* Signed informed consent
* Laboratory values fulfilling the following:
* Serum creatinine \< 2.0 mg/dL
* Serum total bilirubin \< 2.0 mg/dL
* Serum alanine aminotransferase or aspartate aminotransferase \< 3 times the ULN
* Cardiac ejection fraction (LVEF) ≥ 50% by echocardiography
* Contraception:
* Female subjects of childbearing potential† must agree to use a medically acceptable method of contraception for at least 2 months prior to the first dose of CPX-351 and consent of female patients to use a medically acceptable method of contraception throughout the entire study period and for 6 months following the last dose of CPX-351. Medically acceptable methods of contraception that may be used by the patient include abstinence, diaphragm and spermicide, intrauterine device (IUD), condom and vaginal spermicide, hormonal contraceptives (patients must be stable on hormonal contraceptives for at least the prior 3 months), surgical sterilization, or post-menopausal (≥2 years of amenorrhea). Medically acceptable methods of contraception that may be used by the male partner of a female patient are condom and spermicide or vasectomy (\>6 months prior to Day-1) and are to be used throughout the entire study period and for 6 months following the last dose of CPX-351.
* Male patients must be willing to refrain from sperm donation for 6 months following the last dose of CPX-351 and must use adequate contraception throughout the entire study period and for 6 months following the last dose of CPX-351.
* Combined oral contraceptive pills are not recommended. It is recommended that during the study two medically accepted methods of contraception (e.g. as hormonal contraceptive methods along with a condom) apply.

Exclusion Criteria:

* Patients with history of myeloproliferative neoplasms (MPN) (defined as a history of essential thrombocytosis or
* polycythemia vera, or idiopathic myelofibrosis prior to the diagnosis of AML) or combined MDS/MPN are not eligible.
* WHO-2016 defined AML entities: AML with t(15;17), PML-RARA; AML with t(8;21), RUNX1-RUNX1T1, AML with inv(16)/t(16;16), CBFβ-MYH11; AML with biallelic CEBPA mutation; AML with mutated FLT3 or NPM1.
* Clinical evidence of active CNS leukemia.
* Patients with a "currently active" second malignancy other than non-melanoma skin cancers. Patients are not considered to have a "currently active" malignancy if they have completed therapy and are considered by their physician to be at less than 30% risk of relapse within one year.
* Any major surgery or radiation therapy within four weeks prior screening.
* Patients with prior treatment of either CPX-351, hypomethylating agents, cytarabine or intensive chemotherapy for high-risk MDS or AML.
* Patients with prior cumulative anthracycline exposure of greater than 368 mg/m2 daunorubicin (or equivalent).
* Any serious medical condition, laboratory abnormality or psychiatric illness that would prevent obtaining informed consent.
* Patients with myocardial impairment of any cause (e.g. cardiomyopathy, ischemic heart disease, significant valvular dysfunction, hypertensive heart disease, and congestive heart failure) resulting in heart failure by New York Heart Association Criteria (NYHA Class III or IV staging).
* Active or uncontrolled infection. Patients with an infection receiving treatment (antibiotic, antifungal or antiviral treatment) may be entered into the study but must be afebrile and hemodynamically stable for ≥72 hrs.
* Current evidence of invasive fungal infection (blood or tissue culture); patients with recent fungal infection must have a subsequent negative cultures to be eligible; known HIV (new testing not required) or evidence of active hepatitis B or C infection (with rising transaminase values).
* Hypersensitivity to cytarabine, daunorubicin or liposomal products.
* History of Wilson's disease or other copper-metabolism disorder.
* Female patients who are pregnant or lactating.

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